As we are cashing in RESPs now and have to transition out of equity mutual funds due to shorter investment time horizon (Investor's Group rules) we need to find a good place to park money - Meridian's has a nice RESP savings rate of 1.75%. You could consider this as the fruit of your loins (your kids) approach university age and you transition into something safe to preserve capital and earn a little to counter inflation.

Meridian has branches across Ontario - a new on here in the Beaches - they are promoting the credit union at the CNE this year. Being Ontario chartered, deposits are protected through The Deposit Insurance Corporation of Ontario (DICO). It insures Canadian currency deposits, including interest, to a maximum of $100,000 per customer. Unlike CDIC which has an insured limit, deposits held in RSP, RIF, LIRA , LIF, RESP, and TFSA accounts are fully insured with no maximum amount. Unique trust or joint accounts are insured separately from those in your own name, to a maximum of $100,000 per account.

SPR & Co LP is a new operating company created assuming portfolio management of the Canadian diversified assets of Sprott Asset Management LP. Sprott Private Credit Trust (SPCT) is also merging into Sprott Private Credit Trust II (SPCT II) with the combined fund renamed as Sprott-TEC Private Credit Fund.

With the changes, the new fund is no longer tax sheltered as the forward contract has ended - this means a capital gain for the unit holder in 2017. The merger FAQs indicate some of the reasons for the changes:

1) To simplify ownership structure for the relevant assets
2) To ensure unitholders’ tax liability in SPCT is in line with their economic benefit in the
same tax year.
3) To potentially lower annual fixed costs to unitholders of SPCT and SPCT II, as the merger
would increase assets under management in the remaining fund.

Returns on the trust have been steady (see example table below) and with the same sub-advisor can be expected to continue :

The following sums up how private lending decisions are made:

Investment Criteria for Private Credit Loans

VALUABLE ASSET COLLATERAL

Senior liens on self-liquidating working capital assets and critical business assets with realizable liquidation values

Accredited investors wanting to benefit from the strong housing market in the GTA and beyond can look to Greybrook Realty Partners for strong results - that is our experience so far. Who is Greybrook? As noted on their web site:

"Greybrook Realty Partners is the real estate investment and asset management division of Greybrook Capital, a North American private equity firm focused on making investments in the real estate and healthcare sectors. We invest in a range of real estate asset classes with one goal in mind: generate exceptional risk-adjusted returns for our investors while contributing to the economic prosperity of communities in our target markets."

They partner with you (the investor) and developers on projects like these:

Their (our) developer partners are listed on the bottom and include respected names in the development industry.

Buy in the core, and don't wait.

Why did we invest with Greybrook? My dad (RIP) used to share a few nuggets of wisdom on investing: "Buy land. They don't make it anymore", and "Buy on the fringes, and wait".

Greybrook does this and more - they also buy land in the core, as well as on the fringes where there will be development in the near future. This means land with existing development zoning designations and servicing in place to support more immediate development. Why wait for zoning and servicing if you don't have to right? For example one project on the go is right at the Main Street subway station in Danforth Village - rendering at right - already zoned and serviced and now going for site plan approval.

After reviewing a few opportunities for projects in Cambridge, Ontario and in the US, we invested in several low rise projects in the GTA, including projects "on the fringe" with a longer time horizon. the "Oakville" project has Secondary Plan approval and is in the early stages of planning servicing. It is in partnership with Cityzen Development Group and Tercot Communities. Buy land - check. Buy on the fringes and wait - check. This works if you don't need your investment back in several years. The projected project return are generally in the 20% range based on estimates of number of units that will be sold and their price. Greybrook does a good job at explaining risk factors to potential investors.

We also invested in a few projects in developed areas - Markham III - that is a townhome development in Markham, Ontario, in an area that is already zoned and serviced at McCowan and 16th Avenue. We checked public municipal council records on the site for our due diligence to ensure that the Markham III site had no signficant barriers to going ahead - depending on the site investors can do this too. By all means, check official plans, secondary plans, committee of adjustment reports, regulatory mapping from conservation authorities (is it in a floodplain .. of is a lot of the site constrained due to environmental features like provincially significant woodlots,etc.), or upper tier municipalities (is it a well head protection zone, OK that one is far fetched but it "is a thing", etc). Good news! Greybrook and their partners are already doing this due diligence too - otherwise they do not want to be involved as partners either.

Success so far. Markham III land was 'flipped' for about an 80% profit in 18 months or so. Greybrook and investors are now partnered with the new developer Treasure Hill (you see their sign in right field at the Roger's Centre .. to me the Skydome), and the project is called Trendi Towns - Markham V. Other projects have had this 'jackpot', if you will, like Lakeshore. A RedFlagDeals post suggested they made 90% in 27 months, again by advancing the development and then flipping the land.

Working with Greybrook as a investor has been easy and efficient so far. Face to face meetings to get started are downtown on Yonge Street at their office. There are electronic sign-offs for some paperwork which is convenient. Regular updates on project milestones are provided - but you are essentially hands off with the developer and its consultants (marketers, planners, engineers) doing the heavy lifting to move projects from concepts to tendered construction drawings, sales offices, serviced lots and finished homes and buildings.

We hold some projects in registered accounts through Olympia Trust and other projects as non-registered investments. The 'payouts' are at the end of the project, so you money is 'tied' up in the land and servicing until homes are sold (or the land is flipped). Profits are capital gains in the year they are received, so tax planning is important given that returns come all at once.

The Bank of Canada dropped the overnight rate by 0.25% today. Stay tuned to see what lenders will do - one lender has dropped their prime rate by 0.10%. The last BoC rate drop was in January 2015, and lenders dropped their prime rate by 0.15%, compared to the 0.25% BofC rate drop.

Your lender will usually send a notice in the mail advising of their actual prime rate change, if you hold a variable rate mortgage or line of credit.

Looking for an alternative to Questrade? Now RRSP and TFSA Accounts are available at Interactive Brokers

In response to the numerous requests received to offer tax advantaged accounts to Canadian clients, Interactive Brokers announced the availability of Registered Retirement Savings Plan (RRSP) and Tax-Free Savings Accounts (TFSA). Both accounts offer tax-free accumulation of earnings, with taxes on contributions and earnings deferred until withdrawal in the case of the RSP and no tax on withdrawals of post-tax contributions and earnings from the TFSA.

Opening an account is simple and can be initiated from your existing account by logging into Account Management and selecting the Manage Account, Add or Link Accounts, and then Create Linked Account menu options. Once linked, your new RRSP and/or TFSA account will benefit from a shared user name, security device and market data subscriptions. Yes you get that cool spy code card that Alan Turing invented in the Imitation Game so you can log on in privacy with encrypted codes! Just kidding about that.

The minimum initial funding requirement for RRSP accounts is USD 10,000 and TFSA accounts USD 5,000 (or CAD equivalent). Funding can be by cash deposit and/or securities transfer with funding instructions made available within the application. RRSP accounts are subject to a quarterly maintenance fee of CAD 12.50, or $50 per year - if you hold low cost ETFs in the account and have a balance of $10,000 then the fee is only 0.5% on top of your MERs. Note Questrade has no RRSP account fee.